The accountant for Sam Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected: Support Departments Operating Departments Maintenance Cafeteria Cutting Packaging Direct costs $ 50,000 $45,000 $275,000 $300,000 Number of employees 15 10 150 250 Square feet 1,500 2,000 3,500 4,000 If the step-down method is used and maintenance is allocated first, the total cost allocated to the cutting department will be $55,757 $ 39,243 $20,822 $40,208. I need help with explanation. Thanks!

The accountant for Sam Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected: Support Departments Operating Departments Maintenance Cafeteria Cutting Packaging Direct costs $ 50,000 $45,000 $275,000 $300,000 Number of employees 15 10 150 250 Square feet 1,500 2,000 3,500 4,000 If the step-down method is used and maintenance is allocated first, the total cost allocated to the cutting department will be $55,757 $ 39,243 $20,822 $40,208. I need help with explanation. Thanks!

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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